Lack of environmental funding

Growing fiscal constraints and competition for ever-dwindling public resources have seen the environment being sacrificed in terms of budgetary allocations for the more pressing demands of health and education. As a result, donor funding is often sustaining most environmental management programmes.

In all developed and some developing countries, 20 to 45 per cent of GDP is transferred to the central government as taxes and other revenue, representing a significant effort to meet the collective needs of society for security and welfare (World Bank 1998). In comparison, global contributions to the United Nations and other international organizations are minimal, even though the need for global political, social and environmental security is growing. As a greater proportion of wealth creation by the private sector is globalized and escapes national taxation, the base of economic activity supporting national environmental and social action, as a proportion of total activity, will shrink. The lack of international sources of funds for environmental protection is one reason why global environmental stewardship is falling so far behind development.

There has been a decrease in ODA by governments leading, in effect, to a decreased capacity of public sector and multilateral agencies to deliver public goods such as environmental health. Public agencies in most countries are hampered by their tremendous debt burden, and environmental agencies and activities are often among the first to be cut back in order to manage deficits and interest payments (Martens and Paul 1998). The international financial situation thus has a direct impact on the ability of countries to address important environmental and social issues.

Many public environment agencies have experienced severe cutbacks over recent years. These cuts have affected the ability of these agencies to fulfill their core responsibilities. While sustainable development requires that sectors and agencies integrate the environment into their decision-making, this does not make environment agencies redundant nor is it a reason to reduce their budgets or to cut back on environmental spending. On the contrary, environmental agencies should take the lead in integrating environmental considerations in other policy domains from a position of strength. This will require the establishment of cross-cutting institutions whilst maintaining strong environmental agencies able to assess the overall state and trends of the environment, implement environmental policies and enforce environmental laws.